In Dufault v. Toronto Dominion Bank1, the Ontario Superior Court confirmed for the first time that under new section 4.1 of the Class Proceedings Act (CPA), pre-certification motions that can dispose of the proceeding in whole or in part, or can narrow the issues or the evidence must be heard before certification subject to certain limited circumstances.
The enactment of section 4.1 marks a stark departure from the prior approach to the sequencing of class action motions in Ontario, which often resulted in courts refusing to permit such motions to be heard in advance of certification. In Dufault, the Court confirmed a legislative presumption in favour of pre-certification motions signaling an emphasis on procedural efficiency, speedier resolution of class actions, and the avoidance of costly certification motions where possible.
Prior to the enactment of section 4.1, the scheduling of pre-certification motions was governed by the previous version of section 12 of the CPA which provided that “the court, on the motion of a party or class member, may make any order it considers appropriate respecting the conduct of a class proceeding to ensure its fair and expeditious determination and, for the purpose, may impose such terms on the parties as it considers appropriate”2.
While the general principle was that certification ought to have been the first procedural matter to be heard and determined, in Cannon v. Funds for Canada Foundation3, the Court set out a non-exhaustive list of factors relevant to the exercise of the court’s discretion to schedule pre-certification motions under section 12, including:
The party bringing the scheduling motion had the burden of demonstrating why the court’s discretion should be exercised.
In Dufault, the Ontario Superior Court interpreted section 4.1 for the first time since it came into force on October 1, 2020. The defendant in the proposed class action filed a motion for summary judgment requesting that the action be dismissed before certification. The plaintiff asked that the two motions be heard together.
The proposed class action alleged that the defendant bank improperly charged multiple NSF fees on a single rejected payment or bounced cheque. The defendant submitted that the plaintiff’s claims had no merit and that a summary judgment would narrow or dispose of all or part of the litigation. The Court agreed, finding that the defendant’s motion raised genuinely arguable issues that could narrow or dispose of all or part of the litigation and was not merely a delay tactic. In addition, no certification record had been filed nor had the certification motion been scheduled.
The Court reviewed the legislative history and intent of the newly enacted provision before applying it to the defendant’s sequencing motion. The Court noted that section 4.1 originated from a recommendation in the Law Commission of Ontario’s Final Report on Class Actions. The LCO recommended “that courts support/endorse pre-certification summary judgment motions or motions to strike if such a motion will dispose of the action, or narrow the issues to be determine or the evidence to be filed at certification”4.
The Court also quoted from Attorney-General Doug Downey’s speech to the provincial legislature outlining the reasons for the section 4.1 amendment, which highlighted that a key reason for the amendment was the expensive and time-consuming nature of class proceedings which “use valuable court resources” and can involve “significant financial and reputational risks for Ontario businesses”. The Attorney General explained that the need for section 4.1 was to alleviate pressure on Ontario businesses as “[I]t is expensive and time-consuming for businesses to defend class actions that are dormant, that don’t have merit, or can’t be resolved in a reasonable amount of time”.
On this basis, the Court concluded that section 4.1 had a clear legislative intent: “if a pre-certification motion can arguably dispose of the proceeding in whole or in part, or can narrow the issues or the evidence, the motion must be heard before certification, unless the court orders that the two motions be heard together”5.
Finally, the Court noted that despite the language in the provision signaling the legislative preference, the provision maintained a measure of judicial discretion. While the Court in Dufault interpreted the provision as a strong legislative signal of the presumption in favour of early motions, it remains to be seen how widely the judicial discretion is interpreted going forward.
The Court established that a defendant has a presumptive right to have certain motions heard and decided before a certification motion, but also maintained some judicial discretion. A plaintiff can displace the defendant’s presumptive right by persuading the court that there is “nonetheless an overarching and good reason for the two motions to be heard together”6.
The Court set out two “good reasons” for denying a request for a pre-certification summary judgment motion:
No other province’s class proceeding legislation has a provision akin to Ontario’s newly enacted section 4.1. Rather, in other jurisdictions, the exercise of the court’s discretion in scheduling pre-certification motions mirrors Ontario’s prior approach. To that end, the courts in other jurisdictions, including British Columbia7, Alberta8, Saskatchewan9, Nova Scotia10 and the Federal Court11, have all adopted some version of the Cannon factors to be considered when exercising judicial discretion in scheduling pre-certification motions.
While the courts in some jurisdictions, such as British Columbia and Alberta, have stated there is no presumption that certification motion ought to be the first procedural matter to be heard, the approach in other provinces differs. For example, in Saskatchewan, a “certification first, with exceptions” approach exists that is similar to Ontario’s prior approach.
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